By Vlad Cuc, specialist in company formation matters
Companies registered in Singapore must have at least one shareholder and a maximum number of fifty. The shareholders may be legal entities or natural individuals. One resident must act as the manager of the company, but it may also have other local or foreign directors. Only natural persons above the age of 18 are accepted as company directors or managers in Singapore. If you want to open a company in Singapore, our incorporation agents are at your disposal.
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We invite you to read below details about the procedure of setting up a company in Singapore provided by our agents.
Business forms in Singapore
There are various types of companies in Singapore. These are:
- the sole proprietorship which implies very few requirements and is very easy to create; our Singapore company formation agents can help you register as a sole trader;
- the partnership which can be general and limited and is not considered a legal entity separated by the owner;
- the subsidiary, the branch office and the representative office which are suitable types of business forms for foreign companies in Singapore.
Our company formation consultants in Singapore can help foreigners register any of the types of companies mentioned above. Businessmen interested in starting a business in Singapore should also know that the private limited liability company, shortly known as LLC or Ltd., can be used for creating an offshore company in Singapore. An offshore company is a business entity established for trading purposes outside the country it is registered in. Singapore allows both local and foreign investors to open this type of company, which will usually take the form of a limited liability company.
A natural person, a local resident must be the secretary of the Singapore offshore company. It may not be in the same time shareholder of the company or manager. There is noauthorized capital requested at the incorporation of an offshore company in Singapore but a symbolic share capital of at least 1 dollar must be deposited. It is important to know that the Singapore legislation is not allowing a foreign entity to self-register as an offshore company; the process must be carried by a local professional agency.
7% standard rate, a 0% rate applies to certain goods.
Number of double taxation treaties (approx. )
Do you supply a Registered Address/Virtual Office?
Local Director Required
Annual Meeting Required
Is Accounting/Annual Return Required?
Any tax exemptions available?
Corporate tax exemption available for startups for the first 3 years.
Any tax incentives (if applicable)
Investment incentives, internalization incentives, intellectual property deductions are available.
Requirements for setting up an offshore company in Singapore
The first step for opening a Singapore offshore company is reserving a trade name with the Accounting and Corporate Regulatory Authority in the city-state. In order to avoid any problem, our company registration specialists in Singapore recommend foreign investors to select three different names and submit them for approval with the Trade Register. Out of those, they can then choose the one they intend to use for the company. This process is completed online and will imply the same procedure as for any other type of legal entity recognized by the Company Law in Singapore.
The requisites related to opening an offshore company in Singapore are the same as for an onshore business and will imply at least one shareholder, a director, and a secretary. However, in the case of the offshore company, one of the shareholders can take the role of a company director. Singapore does not impose any restrictions on the shareholders of an offshore company. The minimum number accepted is one, while the maximum number is 50 if the company is a private limited liability one. Also, these can be natural persons or other companies.
Where no resident director or secretary is available, this role can be taken by a nominee director or secretary. We offer such services at very affordable prices.
Another requirement related to starting an offshore company in Singapore is having a legal address in the city-state. We can also help with virtual office services, which can be used in the first stage of company registration in Singapore.
- the passport copies of the shareholders and the managers,
- their residential addresses, as well as details regarding the parent company.
Then, ACRA (Accounting and Corporate Regulatory Authority) will issue the certificate of registration of the offshore company. Next is the registration for the Goods and Services Tax at the Inland Revenue Authorities of Singapore.
It must be noted that even if the activities of the Singapore offshore company target other markets than the local one, the business licenses and permits necessary for these activities must be obtained with the local authorities. These will be obtained the same way as for any onshore company registered in Singapore. We remind investors that we can help them open a company in Singapore and obtain the required licensesby providing specialized assistance. After these licenses and permits have been obtained, the company may start its business.
- at least one director is required for opening an offshore company in the city-state;
- at least one of the directors must be a Singapore resident (nominee directors are also permitted);
- the director must be a natural person and must be at least 18 years old;
- the company can appoint several directors upon incorporation.
As mentioned earlier, the company secretary is a mandatory requirement no matter the type of company a foreign entrepreneur decides on. Just like in the case of a director, the secretary must be a natural person and a Singapore resident. It is also possible for one of the shareholders or directors to be a company secretary in an offshore company.
Company secretary services are also available with our company formation agents in Singapore.
It should be noted that in the case of foreigners opening an offshore company in Singapore the appointment of a local agent to complete the registration with ACRA is mandatory. This requirement applies no matter the type of business foreigners decide to open a Singapore company. Do not hesitate to reach out to us for information on all the company formation services we can provide.
Steps for opening a company in Singapore
The local agent, who can be one of our specialists in company incorporation in Singapore, will be in charge with:
preparing the incorporation documents for your future company in Singapore, which are represented by the Memorandum and Articles of Association;
translating and notarizing the future business' incorporation documents and the owners’ identification papers;
obtaining the company’s seal, which is one of the first steps and a mandatory requirement in Singapore;
filing all the documents with ACRA and obtaining the business license and the company’s business profile;
registering with the Inland Revenue Authority in Singapore for taxation purposes and for obtaining a GST number.
Advantages of opening offshore companies in Singapore
There are many reasons why companies choose to open offshore companies in Singapore.
First of all, the registration procedure is very easy, and the process is made online, so the bureaucracy is almost inexistent.
Another major reason is the small taxes and sometimes their absence related to the company’s activities. For example, the capital gains are not taxable; also, there is no tax on dividends.
If a company is formed by less than 20 shareholders (from which one is keeping 10% of the shares), in the first three years the company is subject to a 0% tax rate on the first 100000 Singapore dollars taxable income. The profits up to 300000 Singapore dollars are taxed with a corporate income tax of 8.5% and a flat 17% for above 300000 Singapore dollars.
The foreign source income, not delivered in Singapore, is exempt from Singapore fees. Also, the foreign source of income that meets certain conditions received in Singapore may be exempt from these taxes. Please free to address to our Singapore lawyers for consultancy in a wide range of legal matters, including taxation. You can also use our tax calculator in order to see the taxes you must pay in Singapore.
Even if Singapore offers a low taxation system, it is not considered a tax haven which why it is possible to set up offshore companies here without any risks.
Another reason why opening an offshore company is appealing is the fact that the foreign ownership of the company is allowed 100% in all the sectors and no authorization is requested at registration from Singapore’s authorities.
An important advantage of the Singapore offshore company is having the same rights to bringing various amendmentsto the business. Among these, the company can change its registered address, the shareholders and directors, but also the share capital. All these changes must be reflected in the company’s Articles of Association and the records of the Commercial Register.
Singapore offshore companies can be used for various purposes, however, among the best uses we mention the following:
- the offshore company can be used for minimizing taxes in the shareholder’s home country;
- for commercial activities in countries all over the world while having a stable and well-reputed fiscal domicile;
- the offshore company can successfully be used as a holding company in Singapore;
Opening an offshore company in Singapore has many benefits which can be explained by our specialists who can also help foreign investors interested in using such a business entity for economic operations all over the world.
We also invite you to read about how to open Singapore company in the scheme below:
A brief comparison between onshore and offshore companies in Singapore
Foreign investors who have decided to open a company in Singapore usually spend more time on choosing the type of legal structure suitable for their needs.
While registering an onshore company has obvious benefits, such as tax incentives for the various sectors offered by the Government and thus offering broader prospects related to the industry the enterpriser wants to invest in, the offshore company can also take advantage from tax exemptions under the conditions seen above. However, most individuals think that an offshore company has less credibility than a company registered in Singapore which is why they might be inclined towards the latter. But once more, Singapore is not considered a tax haven, so the offshore company will not encounter any difficulties when it comes to doing business in other countries.
When taking into consideration which option is better, it is best to ask our Singapore company formation experts who can offer detailed information about the registration of each type of company. Moreover, we can also assist you with the company registration procedures for both types of structures.
Costs of company formation in Singapore
Before setting up a companyin Singapore, an investor must consider the following costs:
registration fee: the registration fee of a company in Singapore with ACRA is around 250 EUR, however, the cost will depend on the type of company chosen;
virtual office: the cost of a virtual office per month starts at 51 EUR, which is much cheaper compared to renting a traditional office;
minimum share capital: there is no minimum amount of money required for the registration of a private limited liability company in Singapore;
company formation fee imposed by our specialists in company incorporation in Singapore is approximately 600 EUR for a basic package;
accounting fees: the accounting fees start at 100 EUR/month, however, an estimation of the company's yearly turnover must be provided for an exact price.
What are the other business start-up costs in Singapore?
- creating the company’s seal;
- registration for the employee compensation insurance;
- obtaining the business license will also involve certain costs. However, considering most operations are done online, the company formation procedure in Singapore will take 2 days maximum. The business license will take longer depending on the type of activity of the company.
Post-registration requirements in Singapore
Once the company is registered with ACRA, there are several steps to be taken. Generally, the company will be required to register with different authorities, among which:
- registration for the Singapore Goods and Services Tax (GST),
- apply for the required business license depending on the activity carried out,
- opening a corporate bank account,
- registration for the Central Provident Fund (CPF),
- registration for the Skills Development Levy (SDL).
The registration for the CPF and SDL is required for paying the taxes associated to hiring workers in Singapore. Companies must also appoint an auditor. Businessmen interested in setting up a company in Singapore can receive complete assistance from our team of incorporation agents.
Taxation of companies in Singapore
The main advantage of starting a businessin Singapore is the tax system which is very flexible for local companies. The standard corporate tax is 17%, one of the lowest in Asia, if comparing the city-state to countries like China, Japan or Hong Kong. It is also useful to know that Singapore does not levy any capital gains or dividend taxes. Also, Singapore has enforced a great number of double taxation agreements which help foreign investors to repatriate their profits with low or no expenses at all. Apart from that, the Government also offers many incentives through which taxes can be minimized.
Considering company registration in Singapore must be done by a resident or a professional firm, we invite you to contact our representatives for a simplified procedure.
What are the best industries to open a Singapore company?
- trading, which is one of the most prolific industries in Singapore at the moment;
- the offering of consultancy services in various fields of activity, such as IT;
- investment and asset holding which is possible when setting up a holding company;
- ship management, as Singapore is one of the most important maritime hubs in Southeast Asia;
- intellectual property ownership – Singapore is one of the most advanced countries in the world from this point of view;
- yachting which is used mostly as a recreational means of transportation in the tourism sector;
- real estate, which is another profitable business sector in Singapore.
How to Relocate a Business to Singapore
Foreign companies redomiciling to Singapore must comply with at least two of the following requirements imposed under the law:
- the turnover for each financial year does not surpass 10 million SGD;
- the value of the total assets held by the company at the end of each financial year must be of maximum 10 million SGD;
- the company must have a maximum number of 50 employees at the end of each financial year.
Relocating a large company to Singapore
With respect to large corporations, these can also relocate their businesses to Singapore by de-registering with the Companies Register in their home states and re-registering their seats in the city-state. However, they must also take into account aspects such as buying a land plot where their factories or offices can be accommodated. One of their advantages is that Singapore has one of the most buoyant commercial real estatesectors in the region which provides for places within the city or in one of the free zones where large companies can set up their relocated operations.
Are there any other requirements for companies seeking to relocate to Singapore?
Yes, there are a few more requirements under which a company can relocate to Singapore. One of these refers to the fact that the legislation in the foreign company's home country must provide for the re-domiciliation of businesses. Also, the company must file a document which proves its financial soundness along with other documents. These documents are:
- a true copy of the incorporation documents of the company;
- the registration papers through which the company seeks re-domiciliation;
- the receipt showing the payment of the registration fee.
Within 60 days from relocation, the foreign company must file proof of the de-registration issued by the Companies Register in its home country with ACRA. Then the transfer of operations is complete and the company can start its activity in the city-state.
We also invite you to watch our video below about the process of setting up a company in Singapore:
FAQ on how to open a Singapore company
1. Who can open a company in Singapore?
Anyone can start a company in Singapore, no matter their nationality. Foreign investors have the same rights as Singapore citizens, but are also granted different types of incentives for opening companies in the city-state.
2. Does the company have to be registered in Singapore?
Company registration means the business must have a registered address in Singapore. Foreign companies are also entitled to register branch or representative offices, according to the Singapore Company Act.
3. How can I open a bank account in Singapore?
The company formation procedure in Singapore implies the opening of an account with a local bank. The main documents required to open a bank account are the passport and documents related to the company. If you are interested in starting a business in Singapore, our consultants will provide you with detailed information about the necessary documents for opening a corporate bank account.
4. What are the steps for company incorporation in Singapore?
Company incorporation in Singapore is quite simple: you must choose the suitable type of entity, select the company’s name and reserve it with the Singapore Commercial Register, have the Articles of Association drafted by a notary and then submit them with the Accounting and Corporate Regulatory Authority.
5. What is the minimum share capital in Singapore?
The minimum share capital required to open Singaporecompany is 1 SGD. However, the shareholder can deposit the amount they consider necessary for achieving their goals. The amount must also be declared in the company’s Articles of Association.
6. What are the documents required for company incorporation in Singapore?
The most important documents containing information about the company’s structure and business activities are the Articles of Association.
7. How long does it take to register a company in Singapore?
Company registration in Singapore will take about 24 hours. However, where special licenses issued by the Government are necessary, it may take up to 14 days. Our specialists in company formation in Singapore can provide you with more information about the registration timeframe.
8. Do I need special permits and licenses in Singapore?
Yes. Certain types of businesses will require special permits from the governmental agencies. Among these are restaurants, companies offering medical services, educational services and telecommunication.
9. What are the taxes that I have to pay in Singapore?
Singapore is very advantageous from a taxation point of view. The personal income tax applies gradually: it starts at 0% and ends at 20%, while the corporate tax is capped at 17%.
10. Why should I invest in Singapore?
Singapore is one of the most developed financial centers in the world. It also provides numerous benefits to foreign investors, starting with incentives in most of the industries and some of the lowest taxes in the region. Foreign investors interested in setting up a company in Singapore can consult with our team of incorporation agents for more details about the benefits of starting a business in this jurisdiction.
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FAQ on offshore companies in Singapore
Most investors who are considering opening an offshore company in Singapore have a lot of questions. Below, our company registration consultants in Singapore have tried to answer a few of them:
What is a Singapore offshore company?
The offshore company is a company registered in Singapore which trades only outside the city-state. You can also rely on us if you want to open Singaporecompany.
Is it hard to register an offshore company compared to an onshore company in Singapore?
No, the registration procedure is quite simple, and it is not different from the onshore company incorporation process.
How long does it take to register an offshore company in Singapore?
The company registration process of a Singapore offshore company can be completed in about one week.
Does the Singapore offshore company need a company secretary?
Considering the offshore company will be registered in accordance with the Singapore Company Law, yes, it will need a local company secretary.
Does the offshore company need a local director in Singapore?
No, there are no specific requirements related to having a local director when setting up an offshore company in Singapore
Does an offshore company need a local bank account?